The idea of having minimally policed markets, with insider trading being legal, is appealing. One can imagine that the amount of public confidence in the market would be lower, but even if it's 1/2 of what it is today, it's easy to assume that the market might be more resilient, and less prone system wide volatility, which should be a good thing for participants.
However, personally, given a choice, I would want to participate in a market that does its best to prevent insider trading, and most people would agree. So therefore, other markets will be created that provide that service. US markets aren't the only game in town, and people will move their money elsewhere if the perception of fraud is there.
My only fear with these schemes is the extent to which they can be used to fund organized crime, or terrorist activites. That's not Linden's problem though, that's the job of 1st life policing agencies (assuming they work properly). There's no chance it could rise to the level of real world Savings and Loan or Subprime crisis because those happened under a veneer of government approval. Real world banks rise to such dizzying heights on the basis of government patronage: FDIC and legal tender laws, banking commissions providing the illusion of oversight.
It would be an interesting experiment to scrap the SEC, or any government enforcement of contracts, but what would happen is that another nation would choose not to do that and would grow stronger and then choose to take what's yours militarily, or through some other method of economic warfare.
In SL, people don't have to worry about military or economic warfare. Nobody can force you to sell your land, or can destroy it militarily (consider how the US military altered value of land in Bagdad).
Slashdot Mirror
The idea of having minimally policed markets, with insider trading being legal, is appealing. One can imagine that the amount of public confidence in the market would be lower, but even if it's 1/2 of what it is today, it's easy to assume that the market might be more resilient, and less prone system wide volatility, which should be a good thing for participants.
However, personally, given a choice, I would want to participate in a market that does its best to prevent insider trading, and most people would agree. So therefore, other markets will be created that provide that service. US markets aren't the only game in town, and people will move their money elsewhere if the perception of fraud is there.
My only fear with these schemes is the extent to which they can be used to fund organized crime, or terrorist activites. That's not Linden's problem though, that's the job of 1st life policing agencies (assuming they work properly). There's no chance it could rise to the level of real world Savings and Loan or Subprime crisis because those happened under a veneer of government approval. Real world banks rise to such dizzying heights on the basis of government patronage: FDIC and legal tender laws, banking commissions providing the illusion of oversight.
It would be an interesting experiment to scrap the SEC, or any government enforcement of contracts, but what would happen is that another nation would choose not to do that and would grow stronger and then choose to take what's yours militarily, or through some other method of economic warfare.
In SL, people don't have to worry about military or economic warfare. Nobody can force you to sell your land, or can destroy it militarily (consider how the US military altered value of land in Bagdad).